Physiocrat Economics

[RedOctober]

Think I should give a rundown of what Physiocrat ..aka "Laisezz Faire" economics exactly is.

Lets say your an apple farmer and so is your neighbor. Every year the two of you compete in trying to out-sell and out-profit each other. Let's say on an average year you sell each apple for 50 cents and so does your neighbor. If you drop the price, you will sell more apples, but it will be at a loss. If you raise the price, your neighbor will sell at 50 cents and sell more and profit more than you. And of course some years you may have a bumper crop along with your neighbor and you both sell at a lower price in order sell more and profit at least the same. And some years you and your neighbor may have a bad year and have to raise the price due to the shortage.

This arrangement benefits everyone, you and your neighbor make a small profit and the people who buy your apples get it for the lowest price possible.

Sounds great doesn't it!?

This is where the system fails horrendously and falls prey to market manipulation. So during those shortage years your selling apples at 60 cents each. Oh how you wish you could get that price on an average year.....or even a bumper year. So you walk next door to your neighbor and propose that the two of you give an impression that this year will be a shortage. And decide to sell at 60 cents. Of course no one knows how many apples you have so they pay the price....but, then your neighbor kind of leaks out that "he may not have enough apples" and the shortage is worse than they expected. So, people who need those apples don't want to be without and come up to you and your neighbor and start offering 70 cents, others start buying the apples because they think the shortage is worse than that think the price will raise and buy at 80 cents.....more people panic and you and those who speculated start selling at 90 cents...and eventually a buck.

The next year you go back to selling at 50 cents...but, now you and your neighbor plot out when to have "shortages" and they place their new found wealth in a bank in another town so no one suspects. Meanwhile, the rest of the town suffers with less as they spent more of there income on apples and the economy retracts.

This is why Physiocrat economics are an epic fail. Just like Communism, it assumes people will do things for the greater good. Under Adam Smith, Keynes or even Marx, there would be regulation, there would be an apple inspector to verify if there is indeed a shortage....but oh no, its wrong to do that! We want the free economy of laisezz faire so you never know when someone is robbing you....or worse, economically enslaving you.

So, how do you like 'dem apples?

[IV]

I don't quite understand your point red, but I prefer the "free economy" scenario.

I start to get defensive when I feel that even more govt regulation and control is coming. On the couple of occasions I have been ripped off on Ebay by a lousy seller, and the 2 or 3 times a customer wrote a bad check and disappeared into the night...who cares about that. I can live with that.

Like I said, I am way more worried about govt intrusion. Ifind it tough to deal with.The less the better. What we had before the 90's was working, and especially before 9/11....more or less. Now not so much.

[RedOctober]

IV Wrote:I don't quite understand your point red, but I prefer the "free economy" scenario.

I start to get defensive when I feel that even more govt regulation and control is coming. On the couple of occasions I have been ripped off on Ebay by a lousy seller, and the 2 or 3 times a customer wrote a bad check and disappeared into the night...who cares about that. I can live with that.

Like I said, I am way more worried about govt intrusion. Ifind it tough to deal with.The less the better. What we had before the 90's was working, and especially before 9/11....more or less. Now not so much.

Ok, lets look at it this way. Because of these apple producers manufacturing a crisis and then creating an economic contraction.....you lose your job, house and everything you worked for because two guys were greedy.

How much of the French Revolution do you know about? Because of physiocrat policies people literaly starved to death....oh yeah, and government wasn't intrusive at all.

[IV]

Well, since you put it that way.

While we are on the subject, are you for or against the govt getting more involved in our lives and becoming co owners of the banking institutions?

[RedOctober]

IV Wrote:Well, since you put it that way.

While we are on the subject, are you for or against the govt getting more involved in our lives and becoming co owners of the banking institutions?

Ugh....I like niether option.

On one hand we get more of Big Brother on the other hand, do I think MY job and my families livelihood could weather an economic depression? Or for that matter the Molokan brotherhood? We're between a rock and a hardplace...the emporer wins in either scenario and we lose.

[IV]

Oh ye of little faith?